JPMorgan cuts Globant stock price target to $108

On Friday, JPMorgan analyst Tien-tsin Huang revised the price target for Globant S.A. (NYSE: GLOB) shares, reducing it to $108 from the previous $146, while maintaining an Overweight rating. The adjustment comes after Globant’s recent financial update, which did not meet expectations and prompted a significant revision of future revenue estimates. According to InvestingPro data, the stock has fallen significantly over the last three months, with seven analysts revising their earnings downward for the upcoming period. The company currently trades at $132.84, with a market capitalization of $5.85 billion.

Huang’s commentary highlighted that the unexpected shortfall and subsequent guidance adjustment from Globant is likely to lead to a severe reaction in the stock market. The revised forecast for fiscal year 2025 now stands at 7% or $196 million lower than JPMorgan’s estimates following the fourth-quarter results, implying no growth in constant currency organic terms. Despite these challenges, InvestingPro analysis indicates the company maintains a GOOD financial health score of 2.85, with revenue growing at 11.9% over the last twelve months. For deeper insights into Globant’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Despite the setback, JPMorgan continues to support Globant with an Overweight rating. Huang noted that typically, a guidance miss of this nature, particularly announced late in the quarter on February 20th, would prompt a reconsideration of investment theses. However, JPMorgan is willing to overlook this instance based on the assumption that the outlook has become less risky and that management will be driven to execute and leverage a larger pipeline, which is up by more than 20%, after the first-quarter surprise. The company currently trades at a P/E ratio of 34.65x, which InvestingPro analysis suggests is high relative to near-term earnings growth potential.

Huang attributed the miss to a rapid shift from the factors that helped Globant outperform the previous year, notably its strong engagement in B2B2C projects that were put on hold due to increased tariff uncertainties in March. Nevertheless, the company has indicated that quarterly trends have mostly stabilized. Combined with the expectation of favorable billing days in the second half of the year, the outlook is believed to be sufficiently secure.

In conclusion, while JPMorgan has lowered its price target for Globant to $108, it retains a cautiously optimistic stance. The firm acknowledges that Globant’s premium growth narrative will face challenges throughout the year but remains Overweight on the stock.

In other recent news, Globant S.A. has been in the spotlight following its first-quarter earnings report, which did not meet Wall Street’s expectations. The company posted adjusted earnings per share of $1.50, falling short of the analyst consensus of $1.60, and reported revenue of $611.1 million, which was below the projected $624.97 million. Additionally, Globant issued guidance for the second quarter and full year that disappointed investors, with revenue and earnings projections not meeting analyst expectations. The company anticipates second-quarter revenue of at least $612 million and adjusted EPS of at least $1.52, both below consensus estimates. For the full year 2025, Globant projects revenue of $2.464 billion and adjusted EPS of $6.10, compared to analyst expectations of $2.636 billion and $6.82.

The challenging earnings report and weak guidance prompted Piper Sandler to downgrade Globant’s stock rating from Overweight to Neutral, reducing the price target to $116 from $154. The downgrade was influenced by macroeconomic headwinds that impacted revenue growth more severely than anticipated, particularly in Latin America and among major clients. Despite an increase in high-value customers, with 341 accounts generating more than $1 million in annual revenues, the overall outlook remains cautious. CEO Martín Migoya emphasized Globant’s focus on AI-related opportunities and business transformation, while CFO Juan Urthiague highlighted the need to navigate the uncertain global economic environment.

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